This year marked a shift in CEO priorities, from the traditional singular focus on shareholder value to an additional focus on societal well-being, which could significantly change top executives' roles, The Wall Street Journal reports.
This evolution was marked by a decision in August by the Business Roundtable, a coalition of 181 CEOs, who agreed to move away from the idea that "corporations exist principally to serve their shareholders," for the first time since 1978.
Here are three tips for CEOs, based on coverage of this change from The Wall Street Journal:
1. Tap into new skills. CEOs will still need to be able to drive a business agenda, but now more than ever, it will be critical that CEOs can bring interpersonal skills to the table, such as empathy, self-awareness and courage to address controversial topics.
2. Look back in history. This shift has historical precedence: CEOs of companies in the post-World War II era, leading up to the 1980s, were focused on greater societal well-being too. It wasn't until the 1980s that the pendulum swung toward shareholder value and financial results in response to a recession and new global competition, according to The Wall Street Journal.
3. Link environmental, social and governance metrics back to financial value as much as possible. Many CEOs will still be answering to shareholders and working under compensation agreements that incentivize shareholder value. At the end of the day, the new focus on broader social responsibility doesn't eliminate the need to keep an eye on the financial health of an organization.
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